Your pool of customers

Who can enter into a valid and binding contract with no assistance? The same principles apply to both online and traditional agreements. This is important because it determines the pool of your customers. If you cannot contract with a person, they can’t really be a customer of yours.

There are various factors to consider – the person’s “contractual capacity” is only one. The general rule is that every person is entitled to contract, but there are certain categories of people whose capacity to enter into valid contracts is lacking or limited. Restricted categories of persons include minors, insane persons, insolvent persons, prodigals, intoxicated persons and persons under the influence of drugs. In this post we focus on a person’s age or minority.

Previously the age of majority was 21 and all people under 21 needed assistance from their parents or guardians to enter into valid contracts. The Children’s Act 30 of 2005 (the “Act”) has changed the position – the Act does not speak of minors but rather defines a child to be “a person under the age of 18“. The Act determines the age of majority to be 18 years in section 17 as follows:

“a child, … , becomes a major upon reaching the age of 18 years”.

Although it seems obvious that is the same thing, the terminology used is different in that the law of contract speaks of a minor and the Act speaks of a child. But the crux of the matter is majority, which is the terminology used in both the law of contract and the Act and thus there can be no confusion. From this it follows that once a minor/child (a person under the age of 18 years) becomes a major, he has full contractual capacity.

So, only persons over the age of 18 can enter into a contract or agreement with you, with no assistance. A person under 18 can, but with the assistance of a parent or guardian. But this gets tricky – especially in an online environment.